Recurring Deposit is a safest financial tool and it ideal for those who are seeking guaranteed returns from their investments. Recurring Deposits is an ideal product when one is looking for short term financial needs. Short term here means period which extends from 1 year to 3 years. So Recurring deposit takes care of short term needs like:
- Annual Fees of children which are paid in one go
- Creating a fund for a international or exotic vacation
- Setting aside fund for home interior
- Funds needed for Marriage expenses,
Creating a corpus of down payment for buying a new house.
Thus looking at the above scenarios we can clearly see that Recurring Deposit will help us in achieving these objectives as Recurring Deposit provide an 8% to 10% of returns and it does not carry any risk. So when one wants guaranteed liquid returns then Recurring Deposit is the best bet.
A point to be kept in mind is that Recurring Deposits can also be used to create fund for satisfying very short term requirements like for buying a high end mobile phone, gifting tour package to near and dear ones, etc. we tend to push such needs to future but in reality all such needs and many other dozens of small needs are important and special but we rarely plan for them. So satisfying these needs can be taken care by investing in recurring deposit.
For example: Your Parents have their 25th Wedding Anniversary coming soon and you want to gift them a tour, thenthis can be done by saving into Recurring Deposit which converts your small expenditure into goals. With this, you won’t have a financial burden at one point and a wise planning of diverting a certain small sum of your money into Recurring Deposit can help you in achieving your small wishes.